Wednesday, June 16, 2010

So, what is it? Fraud or Practice

Saxon Mortgage essentially is a 'front company' for the deceptive business practices that take place behind the scenes.  They are nothing more than a collection agency for the 'investors' that have continued to play their dirty game of mortgage poker in some smoke filled back room. However, over time, people see through the lies and misrepresentations. They become angered and frustrated with the deceptive and unknowing attitude from the employees at the 'shiny front company'.  Saxon is by no means an innocent party to this crisis.  In the world of crime, they have gone from being the 'lookout' to conspiring with the 'crooks' to encourage more business;  and the kickbacks are worth it.

For our country to believe that the financial industry is free of immoral and corrupt actions on the part of the banks and mortgage companies is preposterous.  Just check out words like Corporate Fraud/Securities Fraud, Money Laundering, embezzlement and racketeering.  These are not words associated with the everyday homeowner.

Let's compare some things. What is the difference between Mortgage Fraud and Predatory Lending Practices?  Mortgage Fraud is FRAUD against banks and Predatory Lending Practices are PRACTICES against borrowers.

Mortgage FRAUD- "You do it and you'll be prosecuted to the fullest extent of the law, period." Mortgage fraud, in the eyes of the FBI, is "relating to fraud, theft, or embezzlement occurring within or against the national and international financial community" for either money or property. This is usually perpetrated by industry insiders such as brokers, mortgage originators, shell companies, title agents/companies, insurance companies and even borrowers.  There's an entire division of the FBI set aside to 'identify, target, disrupt, and dismantle criminal organizations and individuals who engage in fraud schemes'.  When mortgage fraud takes place it is done with the intentions of STEALING money or property from the financial industry. Pretty straight forward. It appears that when the bank has to take the brunt of this loss, it is recognized as an actual crime.

The FBI focuses its financial crimes investigations on such criminal activities as corporate fraud, health care fraud, mortgage fraud, identity theft, insurance fraud, and money laundering. These are the identified priority crime problem areas of the Financial Crimes Section (FCS) of the FBI. 

Then you have Predatory Lending Practices.  The names alone imply that one is not as bad as the other. They're only practicing... they aren't deliberately DEFRAUDING the borrowers. "Just practicing".  Bull, they are deliberately engaging in an act that will eventually cost the borrower something. Hence, they're STEALING from the borrower.

Predatory mortgage servicing is when servicing companies engage in activities that eventually force fees upon the borrower; such as forced insurance, delayed processing of on-time payments, and forced foreclosure due to inaccurate record keeping on their part. This does not account for all foreclosures but it is found in many of the situations that lead to foreclosure.

Does the FBI 'investigate fraud, theft, or embezzlement occurring against the borrower''?  Well, the site documents are sort of misleading. As stated previously mortgage fraud is against the banking industry yet they provide tips to 'protect you from becoming a victim of mortgage fraud'.  The tips are written in a way that suggests they are giving advice to the borrower; like "Know and understand the terms of your mortgage".

So, with that being said, what is it when a borrower is defrauded and deceived by the servicing company and/or the mortgage company, investor, lawyer, etc.? Should the borrower file a complaint with the FBI since they have a whole division strictly geared toward financial crimes or are the borrowers not included in that group?  If the servicer is committing fraud, would  the FBI determine it to be against the borrower or the bank?  Wouldn't a deceitful servicing company be considered a perpetrator or conspirator of a crime intended to defraud the American public for it's own gain and, in some cases, for the investor?

I think they're done practicing.